AI still has a lot of catching up to do

A story in the press recently about a robot that is able to put together an IKEA chair touched upon something fundamental about robotics: that it is much tougher to programme physical dexterity than cognitive ability. It’s called Moravec’s paradox, and it explains why robots can beat the world’s best chess and Go players but cannot walk across a cluttered room. So when we talk about how AI and robotics are going to transform the financial services industry, we need to be careful.

By putting all our faith in robots, we are overvaluing the analytical side of financial advice and undervaluing its human elements. The FCA is guilty of this too, partly because it is harder to measure the value of human relationships than performance and portfolio management. What’s clear is that, at least for the foreseeable future, AI will augment financial advisers rather than replace them.

Six years ago we released a white paper, The Platform Machine: Tuning for Efficiency. In it we discussed that, in spite of ever increasing levels of Assets under Administration, all was not well in platform land. Revenues were rising across the board, but costs were outstripping them, in many cases significantly so. Now, five years later, we are releasing Giving your platform wings, a white paper re-evaluating the current platform industry.